ALVARADO v. DART CONTAINER CORPORATION OF CALIFORNIA

Appellant’s Reply Brief on the Merits

Cal.September 20, 2016

SUPREME COURT CRO FILED §232607 g,.25(b) SEP 20 2016 IN THE SUPREME COURT OF CALIFORNEAgnk A. McGuire Clerk Deputy HECTOR ALVARADO Plaintiff, Appellant and Petitioner VS. DART CONTAINER CORPORATION OF CALIFORNIA Defendant and Respondent AFTER A DECISION BY THE COURT OF APPEAL FOURTH APPELLATE DISTRICT CASE NO. E061645 APPEAL From the Superior Court of Riverside County. Hon. Daniel A. Ottolia. (Super. Ct. No. RIC1211707) APPELLANT'S REPLY BRIEF ON THE MERITS (Service on Attorney General and District Attorney required by Bus. & Prof. Code §§ 17209, 17536.5) LAVI & EBRAHIMIAN DENNIS F. MOSS Joseph Lavi (SBN 77512; (SBN 209776; jlavi@lelawfirm.com) dennis@dennismosslaw.com) Jordan D. Bello 15300 Ventura Blvd., Suite 207 (SBN 243190; jbello@lelawfirm.com) Sherman Oaks, CA 91403 8889 W. Olympic Blvd., Suite 200 Tel: (310) 773-0323 Beverly Hills, CA 90211 Fax: (310) 861-0389 Tel: (310) 432-0000 ATTORNEYSFOR PLAINTIFF, APPELLANT AND PETITIONER HECTOR ALVARADO S232607 IN THE SUPREME COURT OF CALIFORNIA HECTOR ALVARADO Plaintiff, Appellant and Petitioner vs. DART CONTAINER CORPORATION OF CALIFORNIA Defendant andRespondent AFTER A DECISION BY THE COURT OF APPEAL FOURTH APPELLATE DISTRICT CASE NO. E061645 APPEAL From the Superior Court of Riverside County. Hon. Daniel A. Ottolia. (Super. Ct. No. RIC1211707) APPELLANT'S REPLY BRIEF ON THE MERITS (Service on Attorney General and District Attorney required by Bus. & Prof. Code §§ 17209, 17536.5) LAVI & EBRAHIMIAN DENNIS F. MOSS Joseph Lavi (SBN 77512; (SBN 209776; jlavi@lelawfirm.com) dennis@dennismosslaw.com) Jordan D. Bello 15300 Ventura Blvd., Suite 207 (SBN 243190; jbello@lelawfirm.com) Sherman Oaks, CA 91403 8889 W. Olympic Blvd., Suite 200 Tel: (310) 773-0323 Beverly Hills, CA 90211 Fax: (310) 861-0389 Tel: (310) 432-0000 ATTORNEYS FOR PLAINTIFF, APPELLANT AND PETITIONER HECTOR ALVARADO TABLE OF CONTENTS L INTRODUCTIONoesesessscscssscsscccsssssssssssesessessssssssssssisistisussssssitseeeeeeeeeeeeeeeeeeeccee 1 IL. ARGUMENT.......scsssssssssscccsssssssssssssssassusesesssssesessessssssssssssssssnsnasissssissessssseeecccc 3 A. DART, IN A COMPARABLE FACTUAL AND LEGAL CONTEXT, MAKES THE ARGUMENTSREJECTED BY THE COURTIN SKYLINE......ccsessscscssses 8 1. Legal Context Similarities 000.000... c.ccscssesssssescssesssessescssscssscecsescsucausesscassverecesaes 9 2. Factual Similarity Between Skyline and Dart .....c.cccccscscccssssessscssessssesessssseses 13 3. Similarity ofArguments 0.0... ecssesesssssscsescsestesesesesescasssssseseaesersssestssescacees 17 B. DART’S CONCLUSION THATPETITIONER RELIES EXCLUSIVELY ON POLICY IS PATENTLY WRONG.......scssssssssscsscsesssesessssssssssseseesesesteesseatavsens 19 C. THE 1957 OPINION OF THE ATTORNEY GENERALIS A PIVOTAL FACTORIN THE ANALYSIS OF "REGULAR RATE" UNDER CALIFORNIA LAW.....c.cccccsscssssesesescsesesesssssesesseseseesesesesesessssscssstsseeeseceatsnsesees 21 D. THE FIXED BONUSIS A "SALARY"......cccscssssssssssescssssssssssssssssssacssacatscacscaes 26 E. SKYLINE’S "REGULAR RATE" ANALYSIS IS DETERMINATIVE.......0.0.0-.- 27 F. THE DLSE MANUAL'S APPROACHTO FIXED SUM "BONUSES"IS APPLICABLE HERE .........ccssesessssssesesecsesessessscsesesssesesesesseacsessevsnsecacacaceeacaeas 31 G. DART’S REJECTION OF POST-SKYLINE AUTHORITY FAILS TO APPREHEND THE SETTLED NATURE OF CALIFORNIA’S REJECTION OF “FLUCTUATING WORK WEEK”.........cccssssssssssssssesessssesessssssseseensetstseseans33 H. FEDERAL LAW DOES NOT SUPPORTDART..........ccccscssesesesssstsssesececcseeees33 TIT. CONCLUSION......eceeccssesecsesssssesessssssssesscsessesesesessesescaessssssscssstsrssveceaearesenses37 TABLE OF AUTHORITIES Cases Aleman v. AirTouch Cellular 209 Cal.App.4th 556, 568.......ccccceeeee 3, 20 Apple, Inc. v. Superior Court, 56 Cal. 4th 128 (2013).....cccccssccsceceesseeeeees 2 California Manufacturers Assn. v. Industrial Welfare Com. (1980) 109 CalApp.3d 95, Ll Lieescsssscsssssssscsesssssssseseessssessssssecsssssscsseesscaseaecanens 9 Cal. State Employees Assn. v. Trustees ofCal. State Colleges (1965) 237 Cal.App.2d 530, 536... cccssccsssssssssssssscssssssessesessecseseesssessesssceesenceceseees 24 Collins v. Overnite Transportation Co., 105 Cal.App.4th 171 (2003)......... 3 Ghory v. Al-Laham (1989) 209 Cal.App.3d 1487 .......ccccccsssscsssscsesssceees 33 Hernandez v. Mendoza (1988) 199 CA 3d 721,726 ......scccccsssssssssesseees 24, 33 Huntington Memorial v. Superior Court (2007) 131 Cal.app.4th 893....... 33 Industrial Welfare Com. v. Superior Court, 27 Cal.3d...cccccscsscescseseeee 9, 20 Laurel Heights Improvement Association v. Regents ofU.C. (1993) 6 Cal.4th 1112, L127.eeescscsceseesssssesssssesscesssesseesseeeessesesesscsecseseseases 25 Lujan v. Southern California Gas Co. (2002) 96 CA 4th 1200........... 24, 33 Marin v. Costco Wholesale Inc. (2008) 169 CA4th 804, 819......... 16, 29, 32 Morillion v. Royal Packing Co. 22 Cal.4th 575, 592 (2000) ........cccccsee 4,8 Negri v.Koning & Assocs. (2013) 216 Cal.App. 4th 392, 397.........ccccsee 26 People v. Gnass (2002) 101 CA 4th 1271, 1305 .......ccsssccssscsessessssessescees 22 People v. Overstreet 42 Cal.3d 891, 897 (1986)......scssssssssssseesesesecees 2,25 Ramirez v. Yosemite Water (1999) 20 Cal.4th 785........cscccsssssessssesseses 8, 33 Schachter v. Citigroup (2009) 47 Cal. 4" 610, 619 ...c.ccssssscssssecesscsssesseaes 36 Scott v. Pacific Gas & Electric CO., SUP.esscescsscsssssessssssssscssssesscrsssscessens 36 Skyline Homes v. Department of Industrial Relations (1985) 165 Cal.App.3d 239... cscsccssessssessscescsssecesssseseesessseecsseesseseessseseasenss passim Statutes Cal. Const. Art. 14 § Lio. ciccscssscsscssssscssscsrecsesessecsesssacssstscsesssssesseeseecees 20 Labor Code §510...........ccccsscccssssscccescccescesessesscsesesuceseeesee 1, 2, 3,12, 21, 25 Labor Code §515(d)(1) and (2)....ccscsscsssssssssssssssesesesessesssesssssssecsssssseseesees 12 Regulations 29 CFR 778.114 .scsessssssssssssssccssscsssussssssssssssesssucessuessuessusssssesesssisectssesessseaes 18 29 CFR 778.209(@) and §778.110 ...cesscssssscsscscsseessesssscssssessssssecesssessseecees 18 29 CFR 778.20 .ceccsssssssssessssccsssssssssssecsssssssssessutessussasssucssassssisestssecsssecesseeses 33 29 CFR 778.209 ..csecsssssssecsssessssecsssscsssssssssvscsssseerasesssessucsssusesssasecssssvesasesees 33 29 CFR 778.50 seessssssssssssessssescssssessusssscsssssseesesssessecssasssusesssesessssecsesassesercene 33 29 CFR 778.502 .csssssssssessscccsssssssssssscsucssssesessetsssecsusssscssesssssscessssesseeee 34, 35 I. INTRODUCTION This case focuses on one question only: Is Dart's method of calculating overtime compliant with the "regular rate" requirements of California law? The Answering Brief of Respondent misapprehends the law, and the basis in the law, that compels reversal of the Court of Appeal's decision herein. The opening paragraph of Dart's Answer Brief on the Merits makes the bold pronouncement that Dart's overtime calculation methodology "violated no California statute rule or regulation", and Petitioner "bases his argument here,...on nothing more than unsupported and ultimately inapplicable policy." See also Respondent's Brief pgs 18-24 and 35. Contrary to Respondent's contention, Petitioner's position is groundedin both the law and regulations. The statutory basis of Petitioner's claim is Labor Code Section 510. The regulatory basis of Petitioner's claim is Industrial Welfare Commission Wage Order 1, 8 Cal. Code of Regs. 11010. Both these sources of legal rights and obligations create an obligation upon employers to pay one and one-half times an employee's "regular rate" of pay for daily and weekly overtime and, at times, twice the "regular rate". Petitioner's position is based on the law as properly interpreted and applied. This case compels the court to determine the application of the 1 words “regular rate" as they appear in California law to the facts ofthis case. Given the history of California's Wage Orders, applicable precedent, and the re-enactmentof prior "regular rate" language in Wage Orders and the Labor Code after California Courts addressed the issue, it is clear that Dart hasfailed to properly calculate its employee's overtime compensation. Respondentrelies on a provision of the Code of Federal Regulations for its preferred definition of "regular rate". (Resp. Brief pgs 11-18) California authorities acknowledge a clear distinction between "regular rate" under Federal law and State law that compels rejection in California of any formula where an employer pays less per hour of overtime, as the amount of overtime an employee worksincreases. The compelling nature of the California authority interpreting California law in this case is enhancedbyrepeatedlegislative action by the IWC,andultimately passage of Labor Code 510, that did not change the "regular rate" language in the law that wasat the heart of the Skyline Homes v. Department of Industrial Relations (1985) 165 Cal.App.3d 239 (“Skyline”) analysis. "The Legislature is deemed to be aware of existing laws andjudicial decisions in effect at the time legislation is enacted and to have enacted and amendedstatutes ‘in the light of such decisions as have a direct bearing upon them.’ [internal citations omitted].” People v. Overstreet 42 Cal.3d 891, 897 (1986); See also Apple, Inc. v. Superior Court, 56 Cal. 4th 128 (2013). The samerule of construction applies to 2 quasi-legislative bodies that pass regulations in the wake of published authority on the subject matter of the regulations. Aleman v. AirTouch Cellular, supra 209 Cal.App.4th 556, 568 (“Wage orders are quasi- legislative regulations and therefore are construed in accordance with the ordinary principles of statutory interpretation.” citing Collins v. Overnite Transportation Co., 105 Cal.App.4th 171 (2003).). Skyline in 1985 and the Attorney General in 1957 rejected, as antithetical to California's use of the words "regular rate", Federal methods of determining "regular rate" that result in a decrease in the hourly overtime tate with each additional minute of overtime worked. Reenactments of Wage Orders and passage of Labor Code Section 510 after the 1985 Skyline decision did not change the meaning of "regular rate", nor embrace the Federal "fluctuating workweek" methodology. Respondent's position boils down to a belief that since the State Law uses the term "regular rate" and the Federal law uses the term "regular rate", the Federal formula must apply, claiming "California courts have repeatedly endorsed the use of federal law by employers." Respondent's Brief pg. 2, and 11-18. That position ignores the well reasoned Attorney General and Court of Appeal express rejections of the Federal approach, rejections grounded in part on the 8 hour difference in California law and the distinct "purpose" of California overtime law. Skyline, supra. 165 Cal.App.3d at 249-250. It also is contrary to a point this Court made in 3 Morillion v. Royal Packing Co. 22 Cal.4th 575, 592 (2000) "[W]here the IWC intended the FLSA to apply to wage orders, it has specifically so stated." Another theme of Respondent's Answering Brief is an effort to distinguish fixed payments characterized as "salaries" that constitute all of an employee's non-overtime wages from fixed payments for weekend work, characterized as "bonuses" that constitute part of an employee's non- overtime wages. (Resp. Brief at 30-32). As was demonstrated in Petitioner's Opening Brief, this distinction makes no difference. Whether a "salary" in name, or a "bonus" in name, the common process of dividing a fixed amount of wages bytotal hours worked each pay period (a numberthat fluctuates) to determine a purported "regular rate" is unlawful given the impact on overtime pay of that process --Reducing the amount paid per hour with each extra minute of overtime worked. Further, as discussed infra, the "bonus" at issue, as a fixed amount paid irrespective of quantity or quality of work is, per the authority cited by Dart, a "salary". The employer in Skyline applied a Federal computation system that divided the fixed payment amount received by employees in that case by total hours worked during the pay period, regular and overtime. Skyline, supra at 247. If an employee, for example, was paid $800 per week and worked no overtime, she earned a “regular rate" of $20 per hour ($800 4 divided by 40). When the same employee worked 50 hours in a week, under the "fluctuating workweek" methodology, her "regular rate" became $16 per hour, $800 divided by 50. If she worked 55 hours, her regular rate became $14.54 per hour (800 divided by 55 hours). Asthe "regular rate" decreases, the amount per hour paid for each overtime hour worked similarly decreases. The foregoing was rejected in Skyline as not consistent with "regular rate" as contemplated by the IWC. Dart's overtime computation policy is substantively as much of a "fluctuating workweek"policy as the policy rejected in Skyline. As pointed out in Skyline, the Federal fluctuating workweek methodology is characterized by a formula where "the more hours an employee works, the lowerthe regular rate becomes." Skyline, supra at 245. At Dart, an employee paid $15 per hour for 40 hours in a week who works two weekend days receives $630 for the week ( $15 x 40 hours = $600 + $30 for two weekend days = $630. Dividing $630 by 40 hours, yields a regular rate of $15.75. If during the next week there was a fluctuation in hours and the employee worked 50 hours instead of 40 and again worked two weekend days, his "regular rate" decreases under Dart's “fluctuating workweek" formula (50 x $15 = $750 + $30 fixed = $780 divided by 50 hours = a fluctuating workweek "regular rate" of $15.60 per hour). If the next week hours fluctuated again, and the employee worked 55 hours and two weekend days, the regular rate, under the “fluctuating workweek" methodology, would decrease further (55 x $15 = $835 + $30 fixed =$855 divided by SShours = $15.54 per hour). The fact that the fixed payments for weekend work are divided by total hours worked in a pay period in overtime calculations made by Dart was stipulated to. (Slip Op. 2- 3, Appx. 68-70) Thus, as hours per workweek fluctuate and increase under Dart's formula, just as under the formula rejected in Skyline, the actual amount paid per hour decreases. Such approach to overtime calculations is clearly not consistent with "regular rate" under California law. In Skyline, the Court, rejecting “fluctuating workweek", said a method of computation of overtime that would encourage patterns of employmentusing 10 or 12 hour days would be inconsistent with the Wage Order's regular rate language. Skyline, supra at 249. Respondenttakes the position that its formula would not encourage an increase in hours of overtime. Respondent's Brief pg 23-24. However, Dart's formula does encourage extra overtime by making, with each hour of overtime worked, the cost of overtime per hour to go down. A Federal "regular rate" approach with diminishing "regular rates" with each hour worked, clearly encourages employers to schedule more overtime than would be encouraged with a fixed hourly rate based on 40 hours where 6 increases in overtime do not benefit the Employer with decreasingrates. Under California's methodology, the "regular rate" remains constant and does not decrease as more hours are worked. Respondent takes the position that the federal "fluctuating workweek" methodology applies, simply becausethe "fixed amount"in this case is compensation for work on weekends, and is characterized as a "bonus" and the "fixed amount"at issue in Skyline was a fixed amountfor workonall days, not just weekenddays, andcalled a "salary." In championing form over substance, Respondent misses the fundamental core of the California authority that defines "regular rate" in a manner different than the Department of Labordefinition. In calculation of overtime in California, "regular rate" is NOT A RATE that advantages employers by diminishing the amount overtime costs the employer, per hour, as the amountof overtime an employee works increases. It is imperative that this Court correct the mistake made by the Court of Appeal. To hold otherwise would invite employers throughoutthe state to transform hourly pay systems so that employeesget daily fixed amount "attendance bonuses"as the bulk of their wages, and thereby perpetrate a subterfuge to avoid overtime obligations that have been the mainstay of California law for decades. Il. ARGUMENT A. DART, IN A COMPARABLE FACTUAL AND LEGAL CONTEXT, MAKES THE ARGUMENTS REJECTED BY THE COURTIN SKYLINE. Both in this case, and Skyline, a Court is called upon to determine whether a specific provision of the Code of Federal Regulations should control the determination of "regular rate" when a fixed amount of wagesis part of a compensation scheme. In a painstaking analysis, the Court of Appeal in Skyline rejected the application of the Code of Federal Regulations despite a lack of specific regulations in the California law addressing how "regular rate" should becalculatedin the contextofa fixed salary. Respondent's assertion that the lack of specificity in California law as to the meaning of "regular rate" compels adoption of the CFR's “fluctuating workweek” methodology (Resp. Brief 11-18) is belied by Skyline's rejection of that approach, acknowledged by this Court in Ramirez v. Yosemite Water (1999) 20 Cal.4th 785, 795, and Morillion, supra 22 Cal.4th at 592. The Skyline court's analysis turned on a finding ofdistinct rights in California law (8 hour day), and a distinct purpose in California law to punish employers for scheduling overtime. Skyline, supra 165 Cal.App.3d at 249. Skyline ultimately concluded: “Premium pay for overtime is the primary device for enforcing limitations on the maximum hours of work. (California Manufacturers Assn. v. Industrial Welfare Com. 8 (1980) 109 Cal.App.3d 95, 111) Remedialstatutes should be liberally construed to promote the general object soughtto be accomplished. (Industrial Welfare Com. v. Superior Court, supra, 27 Cal.3d at p. 713 In view ofthe dissimilar language and purpose of the California statute and regulation, we conclude that the DLSEhascorrectly interpreted wage order 1-76 to preclude the use of the fluctuating workweek method of overtime compensation." /d, at 250. Dart's arguments here are the same arguments made by the Employer, and rejected by the Court of Appealin Skyline. Respondentfails to provide a compelling argument as to whytherationale of Skyline, and the A.G.'s Opinion before Skyline, should not apply with equal force here. 1. Legal Context Similarities At the time Skyline was decided in 1985, the regulation language at issue was contained in IWC Wage Order 1-76 which provided: "(A) No employee eighteen (18) years of age or older shall be employed more than eight (8) hours in any one workday or more than forty (40) hours in any one workweek unless the employee receives one and one-half (1 1/2) times the employee's regular rate of pay for all hours worked over forty (40) hours in the workweek. Employment beyond eight (8) hours in any one workday or more than six (6) days in any 9 one workweek is permissible provided the employee is compensated for such overtimeatnotless than: (1) One and one-half (1 1/2) times the employee's regular rate of pay for all hours worked in excess of eight (8) hours up to twelve (12) hours in any one workday, andforthe first eight (8) hours worked onthe seventh (7th) workday; and (2) Double the employee's regular rate of pay for all hours worked in excess of twelve (12) hours in any one workday..." At the time, the Labor Codedid notprovide an equivalentprovision. Nowherein the text of the 1976 Wage Order wasthere an inkling as to how "regular rate" should apply in a context where an employee receives, irrespective of quality or quantity of work, a fixed amount such as a fixed amount per week, a salary or a fixed bonus for working specific days in a week,as all or part of a compensation package. Fast forward to the present, and the legal context has not changed. In 2001, the currently applicable Wage Order, IWC Wage Order 7-2001 wasenacted by the IWC.It provides: 3. HOURS AND DAYS OF WORK (A) Daily Overtime - General Provisions (1) The following overtime provisions are applicable to employees 18 years of age or over and to employees 16 or 17 years of age whoare not required by law to attend school 10 and are not otherwise prohibited by law from engagingin the subject work. Such employees shall not be employed more than eight (8) hours in any workday or more than 40 hours in any workweekunless the employee receives one and one-half (1 1/2) times such employee's regular rate of pay forall hours worked over 40 hours in the workweek. Eight (8) hours of labor constitutes a day's work. Employment beyondeight (8) hours in any workday or more than six (6) days in any workweek is permissible provided the employee is compensated for such overtimeat not less than: (a) One and one-half (1 1/2) times the employee's regular rate of pay for all hours worked in excess ofeight (8) hours up to and including 12 hours in any workday, and for the first eight (8) hours worked on the seventh (7th) consecutive day of work in a workweek; and (b) Double the employee's regular rate of pay for all hours worked in excess of 12 hours in any workday... (c) The overtime rate of compensation required to be paid to a nonexempt full-time salaried employee shall be computed by using the employee's regular hourly salary as one-fortieth (1/40) of the employee's weekly salary." In the interim, the Legislature in 2000, responding to an IWC 11 regulation enacted in 1998 that had temporarily eliminated overtime pay for work over 8 hours in a day, but preserved "regularrate’ language, enacted AB 60.It provides in relevant part, at Labor Code §510, consistent with the 2001 Wage Order: "(a) Eight hours of labor constitutes a day's work. Any work in excess of eight hours in one workday and any work in excess of 40 hours in any one workweek andthefirst eight hours worked on the seventh day of work in any workweek shall be compensatedat the rate of no less than one and one- half times the regular rate of pay for any employee..." Neither the TWC nor the Legislature, after the 1985 decision in Skyline, ever adopted an overtime calculation methodology that embraced a system that divided fixed amounts of wages by total hours worked-- fluctuating workweek. In all the post-Skyline enactments, the IWC never said directly or by inference that it was rejecting the Court of Appeal decision on "regular rate" going forward. With one exception, the IWC, in 2001, and the Legislature with the passage of Labor Code §510, continued not to provide guidance for the calculation of "regular rate." The exception was a codification of Skyline’s application to a fixed salary that constitutes all of an employee's non- overtime wages. See Labor Code §515(d)(1) and (2) and IWC Wage Order 1-2001, supra at 3(a)(1)(c). 12 2. Factual Similarity Between Skyline and Dart In support of its position, Dart attempts to argue that Skyline is factually inapposite to the instant case. Respondent's Brief pgs. 2 and 29- 34. This characterization is, when it comesto the issues that drive the case, woefully inaccurate. In Skyline, the employees worked different amounts of time weekly, fluctuating workweeks. Similarly, Dart's employees work fluctuating amounts of time from week to week (Slip Op. 3; Appx 116- 126). In Skyline the salesmen were paid a fixed payment for their work irrespective of the amountof hours they worked in a week and irrespective of whether or not they worked any overtime. Dart employees are paid a fixed amountas part of their wages when they work weekends, urespective of the amount of hours they work during the week or pay period, and irrespective ofwhether they work any overtime. (Appx. 68-70). In Skyline, the rate used for overtime pay was determined through a formula dividing the fixed amount by total hours worked during the pay period, resulting in a situation where the more overtime an employee worked, the lower the amount paid per overtime hour worked. The same facts are operative here. The fixed amounts under Dart's formula are subject to division by the total hours worked, which in turn results in a diminishing amount per hour of overtime worked as the amount of overtime increases. (Pet.'s Opening Brief pgs. 4-8). Respondent's assertion that the facts are inapposite simply does not 13 stand up to scrutiny. Although a fixed amount of compensation in one case was 100% of the non-overtime pay and called a "salary", and here the fixed amount is a smaller percentage of the wage package, the calculation methodology in Skyline and this case are functionally identical, and central to any analysis of regular rate. In both cases, a fixed amountof wagesis divided by total hours workedin the pay period, including overtime hours, and not divided by the maximum numberof non-overtime hours(e.g. 40 hours in a week). Juxtaposing the literal assertions in Dart’s Brief with Skyline's facts, underscores the undeniable similarity of the cases. Respondent's Brief states: "The fact is that the bonus at issue here was not paid for overtime work, which is fundamentally different than Skyline." (Resp's brief pg. 3). In fact, the opposite is true. The "salary" in Skyline was similarly not paid for overtime. As the "bonus"in this case, the "salary" in Skyline was a fixed amountpaid irrespective of whether overtime was worked. Respondent's Brief goes on tostate: "The amount ofthe bonus wasentirely unrelated to how many hours the employee worked in a given day or week and was paid in the same amount whether or not the employee worked any overtime." The same was true in Skyline. The fixed amount in Skyline was entirely unrelated to how many hours the employee worked in a given day or week and waspaid in 14 the same amount whetheror not the employee worked any overtime. Respondent's brief then provides: "[The fixed ‘bonus'] inclusion in the calculation of overtime compensation by Dart did not directly encourage or discourage overtime and there is no logical connection between the payment of the Attendance bonus and whether the employee receiving the bonus ultimately worked overtime in the same given week." (Resp's brief pg. 3). The same is true as to the fixed salary in Skyline. There is no indication in the decision or in logic that would compel a conclusion thatthe fixed salary in Skyline would "encourage or discourage overtime", and there “is no logical connection between the payment ofthe [salary in Skyline] and whether the employee receiving the [salary] ultimately worked overtime in the same given week". Dart represents (Resp's Brief pg. 3) that the facts in this case are "entirely unlike the facts of Skyline where the direct issue was how to calculate pay for the overtime hoursthat were the subject ofthatlitigation”. That conclusion is absurd. The facts here are clearly notat all unlike the facts in Skyline, and the issue in both cases is how to calculate pay for overtime hours when a wage packageincludes "fixed" amounts. Respondent's Brief then goes on to claim that the fixed amount paid by Dart was intended to encourage Dart's workers to appear for less desirable shifts. (Resp’s Brief pg. 3). This intent is as irrelevant to the applicable analysis as the intent of the fixed payment in Skyline to 15 encourage employees to appear for all shifts. In both cases, the fixed paymentis an implied contract exchangefor labor performed. Toward the end of page 3 of Dart’s Brief , Dart claims that factoring a fixed bonusintothe "regular rate" is an expense it took on so that workers would report as scheduled on weekends, ie. perform their jobs as scheduled. It then proclaims "How this 'encourages' Dart's assignment of Overtime is not explained by Alvarado, nor can it be." (See also Respondent's Brief pgs. 23-34). Similarly, Skyline factored its fixed paymentsinto overtime calculations so that workers will perform their job as scheduled. That which Respondent claims Alvarado supposedly cannot explain is completely irrelevant. Skyline 's "encourage" reference condemns a methodology that encourages an employer to work employeesincreasing amounts of overtime by using a formula that decreases the pay rate, lessens the cost of the overtime burden on the employer, as the amount of overtime an employee worksincreases. In Marin v. Costco Wholesale Inc. (2008) 169 CA4th 804, 819, the court succinctly summarized this Skyline concept as followsin a discussion of overtime on flat rate bonuses: "In the case of a true flat sum bonus [Dart's position in this case] where the employee cannot earn any additional bonus by working overtime hours, excluding such hours from the divisor prevents them from diluting the regular rate. Including those hours would give the employer 16 an incentive to impose overtime [encourage employers to schedule overtime] because the additional overtime would reduce the cost of overtime by decreasing the regular rate—part of the situation addressed in the Skyline case." Id, 169 CA 4th at 819. (Emphasis Added). 3. Similarity of Arguments In Skyline, in the absence of specific provisions in the California Wage Order on how to calculate "regular rate" when an employee's non- Overtime wagesincluded a fixed minimum amount, the Employer argued: (1) federal law provides for the fluctuating workweek method of overtime computation, and in the absence of California law or regulation to the contrary, and in view of the similar language and purpose of the California and federal statutes, federal law should be followed; (2) neither the California Labor Code not the Industrial Welfare Commission wage orders preclude the use of the fluctuating workweek method of overtime compensation; (3) the DLSE's operations and procedures manual which interprets wage order 1076 as prohibiting the use of the fluctuating workweek is an improper exercise in rule making and was not promulgated in accordance with the law. Skyline,supra 165CA 3d at 246. Dart's arguments here mimic the employer arguments rejected by the Court of Appeal in Skyline. Here Dart claims: 17 (1) The fluctuating workweek calculation methodology it uses applies to the fixed amount element of the wages in this case because no California law or regulation establishes how to calculate "regular rate" when an employee receives a fixed amount, and the terminology "regular rate" is in both Federal and State law. Resp's Brief pg. 1, and 11-18. (2) Neither the California Labor Code, nor the wage orders, preclude use of the fluctuating workweek methodology adapted by Dart . Resp's Brief pg. 2 and 18-25, and (3) the DLSE's manualis of no force and effect Resp's Brief pg. 2 and 34- 36. Significantly, the precise arguments made by Dart, were rejected by the Court in Skyline. Here, Dart argues that, in a context where State regulations are not specific, federal regulations explain how to calculate regular rate when there is a "fixed bonus", specifically 29 C.F.R. §778.209(a) and §778.110 In Skyline, the employer took a comparable position, that 29 C.F.R. §778.114, which specifically controlled calculation of regular rate on a "salary" under Federal Law, controlled in the absence of State law or regulation defining how to calculate "regular rate" on a "salary". Despite the foregoing argument in Skyline, the Court looked to differences in the language of and intent behind California and Federal law, and discerned that application of the Federal Regulation is not appropriate on account of those differences. The sameresult is compelledhere. 18 As demonstrated above, the facts, the legal context, and the arguments made by Dart here and the employer in Skyline are notat all dissimilar. Having failed to successfully distinguish Skyline, Dart, at a minimum, needed to make a plausible argument why the language and intent of California overtime law that Skyline concluded compelled rejection of “fluctuating workweek", should not apply when the fixed amount at issue in the calculation of overtime is only a small part of the non-overtime wages. Respondentfailed to make such an argument because, as a matter of reason, the Skyline case and rationale applies any time a formula is employed that results in a diminishing regular rate as overtime is increased. B. DART’S CONCLUSION THAT PETITIONER RELIES EXCLUSIVELY ON POLICY IS PATENTLY WRONG. Respondent's Brief repeatedly takes the position that both Petitioner and the Division of Labor Standards Enforcement have taken policy positionsthatare not tethered to the law. In doing so, Dart echoes a central error in the Court of Appeals decision. (Resp's Brief pg. 18-22; Slip Opinion pg. 25). Both the Court of Appeal and Respondentgotit wrong. The "regular rate" laws, upon whichPetitioner relies, are decades of Industrial Welfare Commission (IWC) Wage Order enactments requiring that daily and weekly overtime be paid at multiples of the "regular rate". 19 The IWC’s authority to promulgate Wage Orders derives from the California Constitution. The California Constitution empowers the legislature to delegate responsibility for regulations of wages, hours, and working conditions to a commission.’ In 1913, pursuant to its Constitutional power, the legislature created the IWC to protect the interest of working women and children. Industrial Welfare Commission v. Superior Court 27 Cal.3d 690, 700. In the 1970s, the IWC’s mandate expanded to encompassall California workers. Jd. Given the authority granted to the IWC by the Legislature, the IWC is a quasi-legislative body, vested with the authority to regulate the wages, hours, and working conditions of California employees. Jd. 701-703. In as much asthe IWCis a quasi-legislative body, interpretation of Wage Orders enacted by the IWC comports with the rules governinginterpretation ofstatutes.” In 1911, long before the federal government enacted overtime protections for workers, California enacted the first daily overtime law setting the eight-hour daily standard. For decades, with a two year ' Cal. Const. Art. 14 § 1. “The Legislature may provide for minimum wages and for the general welfare of employees and for those purposes may confer on a commission legislative, executive, and Judicial powers.” * Aleman v. AirTouch Cellular, supra 209 Cal.App.4th at 568 20 exception between 1998 and 2000, the IWC has embracedthe 8 hour day in the regulations it has enacted, compelling overtime pay at multiples of the "regular rate" for work in excess of 8 hours in a day and 40 hours in a week. With the passage of Labor Code 510, the Legislature provided a further legal basis for the conclusion that Dart has violated the law, embracing the IWC's "regular rate" language. Thelaw set forth in the IWC Wage Orders, and in the Labor Code, as interpreted by the Attorney General, and by the Courts, is the basis of Petitioner’s position in this matter. The “public policy” at issue is grounded in decades of California law. C. THE 1957 OPINION OF THE ATTORNEY GENERALIS A PIVOTAL FACTORIN THE ANALYSIS OF "REGULAR RATE" UNDER CALIFORNIA LAW. The May 1957 Opinion of the Attorney General (A.G. Opinion No. 57-29) has been, to use a colloquialism, improperly dissed by Dart. Resp's Brief pg. 36-38. The A.G.'s opinionis significant to the outcomeofthis case for three important reasons. First, it correctly interprets the expression "regular rate"asit appears in California law, and in so doing, pronounces that the Federal Government “fluctuating workweek" methodology is not only inapplicable, it is inconsistent with the term "regular". 21 Second, the Opinion is entitled to significant deference especially when there was, at the time it is written, no Judicial authority on the meaning of "regular rate" under California law. People v. Gnass (2002) 101 CA 4th 1271, 1305. Third, subsequentto publication of the A.G. Opinion , the IWC (to whom the opinion was addressed), andthe Legislature, passed overtime lawsusing the term "regular rate", never deviating from the AG's opinion, never embracing "fluctuating workweek", and never expressing an intentto embrace Federal Law. The Attorney General was carrying out a statutory duty in responding to the IWC's 1957 inquiry. Govt. Code 12519. Significantly, the AG focused, as courts are directed to do, on "plain meaning" correctly pointing out how thereis nothing "regular" about a rate that changes as overtime increases, and pointing out how overtime is by definition, irregular, and therefore, overtime hours should not be used in determining “regular rate". The AG concluded that the California Wage Orders' "regular rate" language precludes use of a "fluctuating workweek" methodology, which it correctly defined "as a method of determining the hourly ‘regular rate’ of pay by dividing the amountregularly paid during the pay period...by the total number of hours worked during such pay period, and using the hourly amount so determinedasa basis for computing 22 overtime pay..." See question posed to the A.G.at Id, pg. 168, and the answer at 170-172. Dart does exactly what the A.G. said was not contemplated under California law. Dart takes the fixed regular amount of $30 paid for two weekend days, or $15 for one weekend day, whether or not overtime is worked, and divides that amount by the total hours worked during the pay period, including overtimehours, "as a basis for computing overtime pay”. The A.G. went so far to say that computation method "is entirely inconsistent with the [IWC] commission orders, and contrary to the general legislative scheme." The A.G. stated "Overtime should not be used in the computation of regular rate, and "it perceived no reason to more clearly spell out a prohibition against the ‘fluctuating workweek’ methodology in Wage Orders". Jd, at 172 The court in Skyline referenced the AG's Opinion asfollows: "The Attorney General’s opinion stated that the fluctuating workweek method was inconsistent with the IWC wage orders. The IWC, on notice of the Attorney General’s May 1957 opinion, enacted regulations shortly thereafter without expressly permitting the fluctuating workweek and has continued to omit permission of that method of computing Overtime compensation from subsequent wage orders. It seems apparent that, correct or incorrect, the IWC relied on 23 the Attorney General’s opinion and did not consider it necessary to add language specifically prohibiting the fluctuating workweek." Skyline Homes, supra 165 Cal.App.3d at 252-253. The significance of this statement in Skyline, takes on additional meaning given that this court has since held: "When construing a statute, we may presumethat the Legislature acts with knowledge of the opinions of the Attomey General whichaffect the subject matter of proposed legislation. (Cal. State Employees Assn. v. Trustees of Cal. State Colleges (1965) 237 Cal.App.2d 530, 536" Burden vy. Snowden 2 Cal. 4th 556, 564 (1992). Subsequent to Skyline, with Skyline doubling down on the A.G.'s opinion, the TWC continued to adopt Wage Orders that included the “regular rate" language unmodified by anything that comes close to adoption of the "fluctuating workweek" computation method. (e.g.1989 Wage Order overtime language in Lujan v. Southern California Gas Co. (2002) 96 CA 4th 1200, 1204; 1980 Wage Order language referenced in Hernandez v. Mendoza (1988) 199 CA 3d 721,726; and 2001 Wage Order referenced supra.) 24 Therole of the Court is to ascertain and effectuate thelegislative intent." Laurel Heights Improvement Association v. Regents of U.C. (1993) 6 Cal.4th 1112, 1127. In the ascertainment oflegislative intent, the post-Skyline, post -A.G. Opinion enactments by the IWC and the Legislature, incontrovertibly compel rejection of the Court of Appeal decision herein. People v. Overstreet (1986) 42 Cal.3d 891, 897 [“the Legislature is deemed to be awareof existing laws andjudicial decisions in effect at the time legislation is enacted and to have enacted and amended statutes ‘ “in the light of such decisions as havea direct bearing upon them” *”). The [WC and the Legislature, when it selected the words“regular rate” from pre-Skyline Wage Orders, never signaled an intent to supersede the holding of Skyline, or the A.G.’s Opinion. There is nothing in the post- Skyline enactments to suggest the Legislative bodies meant to adopt the “fluctuating workweek” computation method. On the contrary, if the Legislature or IWC had wanted to make “fluctuating workweek” applicable, it would have madelittle sense for it to simply reiterate the pre- Skyline Wage Order verbiage without reference to Federal Regulations or other languagedistancing the new laws from Skyline and the A.G. Opinion. If the Legislature, or the IWC, did not agree with Skyline or the A.G., they had opportunities to rectify any error each time new wage orders were enacted, or when Labor Code 510 was enacted. 25 Contrary to Dart's position, as the foregoing history establishes,the law does not permit Dart's overtime computations, computations inconsistent with "regular rate" as that term has beenused in California law for decades. D. THE FIXED BONUSIS A "SALARY" Based on the foregoing, California's rejection of the "fluctuating workweek" compels reversal of the Court of Appeal decision irrespective of whetherthe "fixed bonus"is a "salary". Nonetheless, Dart’s position that the fixed amountit pays for weekend workis not a "salary" is belied by the authorities it cites. Resp's Brief 30-31. Dart points out: " 'A salary is generally understood to be a fixed rate of pay as distinguished from an hourly wage.’ (Negri v.Koning & Assocs. (2013) 216 Cal.App. 4th 392, 397 [emphasis added]." Resp's Brief pg. 30. Dart employees are paid an hourly wageplus salary, (fixed rate of pay ), when they worked weekends, irrespective of the numberofhours worked during the pay period. Dart goes on to makethe further point, citing Negri. supra: "[T]he federal wage and hour laws provide that an employee is paid on a salary basis if the employee: ‘regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or a part of the employees compensation, which amount is not subject to 26 reduction because of variations in the quality or quantity of the work performed.' (/d, at 398).". Resp's Brief pg. 31 (Emphasis Added) The foregoing definition is clearly applicable here. During each pay period in which Dart's hourly employees work weekends, "part [of their] compensation” is a fixed amount of $15 for work on a Saturday or Sunday that "is not subject to reduction because of variations in the quality or quantity [number ofhours] ofthe workperformed" during the pay period. Dart’s argument that the "bonus' was subject to reduction because the employee had to be scheduled to work a weekend shift (Resp's Briefpg. 32) is unavailing becausethat is no different than the fact that an employee employed exclusively on salary basis is subject to not being scheduled to work during a week, and therefore, does not get paid his salary for the week. Respondent's further assertion that Petitioner conceded he was paid hourly wages, not a fixed rate of pay (i.e. salary) is contrary to the stipulated facts that establish Petitioner was clearly paid both hourly wages and a fixed rate for pay periods during which he worked on weekends. E. SKYLINE’S '""REGULAR RATE" ANALYSISIS DETERMINATIVE. Respondent emphasizes differences between the fixed rate in Skyline, called a "salary", that constituted all of the employees' wages, with 27 the fixed rate in Dart, called an "attendance bonus", paid as a small part of the employees’ wages, as a factor that warrants the Court of Appeal conclusion that Skyline does not apply. To this end, Dart points out how Skyline remarked that it did not apply to other than salaried employees. Resp's Brief pg. 27. What Skyline actually providesin this regardis: "[T]he method of computing overtime compensation for employees other than salaried employees is not before us... ‘The dispute in this case centers on the proper method of overtime computation for employees who receive a fixed salary but work a variable number of hours each week. This case does not concern employees working on a commission, piece rate or other wage basis.' There has been no showing that those employees are similarly situated to salaried employees." Skyline, supra at 254. (Emphasis Added) Here, aside from the fact that the "fixed attendance bonus" is a "salary" (See Argument D. supra), the record establishes that Dart's employees "are similarly situated", experiencing a pay schemethat divides fixed amounts by all hours worked in a pay period in the calculation of overtime. Instructive on this issue is Lujan v. Southern California Gas Co. (2002) 96 CA 4"* 1200 where the Court applied Skyline to a fixed wagethat manifested itself as a fixed amount per day on somedays. 28 In further support of the contention that Skyline only applies to Skyline-like salaries, Dart cites Marin, supra 189 CA 4th at 812-813. Marin comments that Skyline was concerned with a fixed "salary" and the specific problem of calculating overtime whensalaried employees work variable hours. The issue is the same in this case, the problem of calculating overtime when employees who eam, in part, a fixed wage, work variable hours. Marin also referenced that Skyline did not specifically address "bonuses". This assertion fails to recognize that Skyline did address "regular rate" under California law applied to fixed wage payments, the issue that drove the Skyline holding. Marin recognizes that Skyline dealt with a "formula that encouraged imposition of overtime because each overtime hour worked reduced the regular rate of pay and with it the cost of overtime hours to the employer." Id, at 813. This factor, that distinguished Marin facts where the "bonus" was not a fixed rate bonus, from Skyline, is clearly not a distinguishing factor here. Id. Onefinal distinguishing factor referenced in Marin wasa factor not clearly established in Skyline. Marin asserted that Skyline was not paying overtime for work over8 hours in a day. Marin, supra 169 CA 4th at 812. Whether or not this is true, Skyline makes clear that given its rationale, this fact does not make a difference — per Skyline, any system that 29 effectively lowers an employer's cost per hour as more overtime is worked is prohibited: "Skyline [the Employer not the case] counters with the argument that the fluctuating workweek does not conflict with wage order 1-76 because an employee who worked more than eight hours a day, but less than 40 hours in a week, would be compensated for overtime by utilizing the same formula as if the employee worked over 40 hours. For example, if an employee worked 39 hours in one week but 12 hours in one day, one would simply divide 39 into weekly salary and determine overtime compensation for the extra four hours worked in one day in that manner. This argument again fails to take into accountthe fact that a purpose of the overtime premium pay requirement is to discourage long daily hours which the Commission has determined are detrimental to the welfare of employees, and further, that the overtime is to discourage the use of daily schedules in excess of eight hours. Clearly, a method of computation of overtime that would encouragepatterns of employment using 10 or 12 hours days would be inconsistent with wage order 1-76." Skyline, supra 165 Cal.App.3d at 254. (Emphasis added). 30 The system Dart employs encourages 10 -12 hour days, just as the system in Skyline. A 10 hour or 12 hour day at Dart costs Dart less per overtime hour than an 8.5 or 9 hour day. F. THE DLSE MANUAL'S APPROACH TO FIXED SUM "BONUSES"IS APPLICABLE HERE Dart inaccurately asserts that DLSE Manual 49.2.4.2 is inapplicable to the facts of this case. Resp’s Brief pg. 34-35. DLSE Manual 49.2.4.2 provides, in relevantpart: "If the bonusis a flat sum, such as $300 for continuing to the end of the season, or $5.00 for each day worked, the regular bonus rate is determined by dividing the bonus by the maximum legal regular hours worked during the period to which the bonus applies. [two week 80 regular hour pay period at Dart]. This is so because the bonusis not designed to be an incentive for increased production for each hour of work; but, instead is designed to insure that the employee remain in the employ of the employer. To allow this bonus to be calculated by dividing by the total (instead of the straight time hours) would encourage, rather than discourage, the use of overtime." DLSE Manualat 49.2.4.2 (Emphasis added). Here, the "bonus"at issue fits within this section of the Manual. A 31 fixed $5.00 per day referenced in the Manual Section, is not unlike Dart's fixed $15 per weekend day in Dart's program. As the DLSE accurately points out: "To allow [either a $5 per day bonus or a $15 per weekend day bonus] to be divided by the total hours instead of straight time hours would encourage, rather than discouragethe use of overtime". Dart’s representation that its *bonus” was not designed to ensure an employee stays employed is not supported by the record, but more importantly misses the DLSE’s point that, fixed payments are not incentives for more productivity like production bonuses or piece work systems, but are designed as part of the consideration for work irrespective of the amountoftime oreffort put in. Dart further asserted that the DLSE Manual provision at issue is inapplicable because it was not tied into a statutory touchstone and relied solely on policy. Resp’s Brief at 35. In makingthis assertion Dart failed to address the clear interrelationship between section 48 and 49 of the Manual. Section 48.1.4 and 48.1.5 address the legal basis for California’s interpretation of “regular rate”, while Section 49 applies section 48 to “Bonus” scenarios. (See Pet’s Opening Brief pg. 35-37.). Marin, supra (2008) 169 CA4th 804, 817-818, makes the salient point that DLSE Manual Section 49.2.4.2 and 49.2.4.3, with its requirement that the divisor in overtime calculations not include overtime hours, is consistent with Skyline. 32 G. DART’S REJECTION OF POST-SKYLINE AUTHORITY FAILS TO APPREHEND THE SETTLED NATURE OF CALIFORNIA’S REJECTION OF “FLUCTUATING WORK WEEK”. Respondent’s Brief at pgs.39-42 claimsthatthe validation by several Courts of Skyline, in Alcala v. Western Ag Enterprises (1986) 182 CA 3d 546, 551, Hernandez v. Mendoza (1988) 199 Cal.App.3d 721, Ghory v. Al- Laham (1989) 209 Cal.App.3d 1487, Lujan supra (2002) 96 Cal.App.4th 1200, Ramirez v. Yosemite Water (1999) 20 Cal.4th 785, and Huntington Memorial v. Superior Court (2007) 131 Cal.App.4th 893, cited in Petitioner’s Opening Brief at pgs.20-31, are all inapplicable. For the reasons stated, supra, Respondent’s position is not well taken especially since those cases,all involved later versions of Wage Orders that reenacted “regular rate” language, and all were in a position to disagree with the Skyline opinion. As pointed out above, Lujan, supra, 96 CA4th 1200, is especially informative because it makesclear the applicability of Skyline to a fixed rate context that does not involve a weekly or monthly salary. Huntington Memorial, supra, similarly rejects a pay plan that effectively reduces overtime pay as overtime increases in a non-salary context. H. FEDERAL LAW DOES NOT SUPPORT DART Petitioner’s Opening Brief pointed out how, given 29 CFR 778.502 and 29 CFR 778.20, Dart’s reliance on 29 CFR 778.209 is not justified 33 under Federal Law. (Pet’s Opening Brief pg. 37-39.). Dart’s Answering Brief does not underminethis analysis. 29 CFR 778.502 provides: (a) The term “bonus” is properly applied to a sum whichis paid as an addition to total wages usually because of extra effort of one kind or another, or as a reward for loyal service or as a gift. The term is improperly applied if it is used to designate a portion of regular wages which the employee is entitled to receive under his regular wage contract" "(e) The general rule may be stated that wherever the employee is guaranteed a fixed or determinable sum as his wages each week [here the case each week with weekend work], no part of this sum is a true bonusandtherules[e.g. 29 CFR 788.209] for determining overtime due on bonuses do not apply." A fixed amount for working a particular scheduled day does not qualify as a bonus given the foregoing. Such payment is not for “extra effort” or “loyal service” or a “gift”. It is Dart’s valuation of market conditions, the amount necessary to get employees to work undesirable shifts, days, not unlike a fixed graveyard shift premium.It is part of an implied in fact wage contract that regularly pays employees $15 for work on Saturdays and Sundays, not unlike the hourly wages paid for work 34 during all scheduled hours. Dart’s Answering Brief claims 29 CFR 778.502 does not apply. “Dart’s employees are not guaranteed the Attendance Bonus as part of their wages each week; they have to earn the Attendance Bonusby showinguptotheir regularly scheduled weekend shifts. It is paid in addition to their straight hourly wages as a reward for their loyalty in service by not calling off work on weekends. The employees are also not contractually entitled to receive the Attendance Bonus indefinitely as it is a voluntary policy that Dart can alter within its discretion.” Resp’s Brief pg. 17. Theseassertions do not stand up to scrutiny. Hourly paid employees are not guaranteed their wages each week either. They can be terminated, or their wages can be prospectively reduced, just as Dart can prospectively discontinue the weekend payplan. Having to earn the Attendance Bonus by “showing up for regularly scheduled weekendshifts” is no different than earning hourly wages by showing up for regularly scheduled weekday or weekendshifts. Not being contractually entitled to receive the Attendance Bonusindefinitely is no different than not being entitled to hourly wagesat a rate above the minimum wage indefinitely. An employerhas a right to change hourly, “bonus”, salary, or any other wage programsapplicable to any at will employee so long as lawful minimumsare paid. 35 “[A]n employer may unilaterally alter the terms of an employment agreement, provided suchalteration does not run afoul of the Labor Code. [cite omitted] see 3 Witkin, Summary of Cal. Law (10th ed. 2005) Agency and Employment, § 236 [unilateral reduction in wage].” Schachter v. Citigroup (2009) 47 Cal. 4" 610, 619. “The at-will presumption authorizing an employer to discharge or demote an employee similarly and necessarily authorizes an employer to unilaterally alter the terms of employment, provided that the alteration does not violate a statute or breach an implied or express contractual agreement. (Scott v. Pacific Gas & Electric Co., supra...” Schachter, supra 47 Cal. 4th at 620. Dart’s analysis of 29 CFR 778.203 is similarly flawed. 29 CFR 778.203 provides, in the part not addressed by Dart's Brief, that the Saturday or Sunday premium being paid “cannot be credited toward statutory overtime due”. Here, with Dart dividing the fixed $15 per weekend day by all hours, including overtime hours, it is clearly being “credited towardstatutory overtime due” It is funding the overtime due by paying in part for the straight time part of the overtime due. Dividing $15 by 50 hours worked in a week applies 30 cents per hour of the bonus to each straight time and overtime hour, literally crediting $3.00 of the bonus (10 hours of overtime x 30 cents) toward Dart’s overtime obligation. 36 Ill. CONCLUSION “'[P]ast decisions teach that in light of the remedial nature of the legislative enactments authorizing the regulation of wages, hours and working conditions for the protection and benefit of employees, the statutory provisions are to be liberally construed with an eye to promoting such protection.’ (/ndustrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 702" Ramirez, supra (1999) 20 Cal.4th at 794-795. In this matter, the foregoing, and a history of statutory construction going back close to 60 years that has repeatedly rejected "fluctuating workweek" computation methods, should ultimately inform and control the outcomeherein. In the absence ofreversal, "attendance bonuses" for every day of the week will become de riguer throughout the State, and hourly rates will plummet on account of an undermining of sensible regulation of overtime computation in California that has been part of the legal landscape since at least the 1950's. Dated: September 19, 2016 Respectfully Sxfpmitted, DENNISF. MOSS, Attorney for Plaintiff, Appellant Hector Alvarado 37 RULE14 CERTIFICATE OF COMPLIANCE Counsel of Record hereby certifies that pursuant to Rule 8.204(c)(1) or 8.260(b)(1) of the California Rules of Court, the enclosed brief of Appellant is produced using 13-point Roman type including footnotes and contains approximately 8,271 words, which is less than the total words permitted by the rules of court. Counsel relies on the word count of the computer program usedto preparethis brief. Dated: September 19, 2016 Ne Pyennis F. Moss 38 PROOF OF SERVICE 1, the undersigned, declare: 1. That declarant is and was,at all times herein mentioned, a citizen of the United States and a resident of the County of Los Angeles, over the age of 18 years, and not a party to orinterested party in the within action; that declarant’s business address is 15300 Ventura Boulevard, Suite 207, Sherman Oaks, California 91403. 2. That on September 19, 2016 declarant served the APPELLANT'S REPLY BRIEF by depositing a true copy thereof in a United States mail box at Sherman Oaks, California in a sealed envelope with postage fully prepaid and addressed to the parties listed on the attached servicelist. 3. That there is regular communication by mail between the place of mailing and the places so addressed. I declare under penalty of perjury that the foregoing is true and correct. Executed this 19th day of September, 2016 at Sherman Oaks, California. rhe Lea Garbe 39 SERVICE LIST Clerk, California Court of Appeal Fourth District Court of Appeal Division 2 3389 Twelfth Street Riverside, CA 92501 Attorney General, State of California 1300 "I" Street Sacramento, CA 95814-2919 40 Attorneyfor Respondents and Defendants: Howard B.Golds, Esq. Elizabeth A. James, Esq. BEST BEST & KRIEGER LLP 3390 University Avenue, 5th Floor Riverside, CA 92502 District Attorney, County of Riverside 2960 Orange Street Riverside, CA 92501